One of the most basic elements of the claims process is that of negotiation. So why is it that so many in claims organizations struggle with effective negotiations? Part of the problem is that the role of adjusters has evolved over the years. Prior to the advent of technology, adjusters primarily spent their time with boots on the ground.

Whether it was writing an appraisal, canvassing a neighborhood and sitting face to face with an attorney, opportunities to hone critical skills were never lacking. This was particularly true with negotiations, which were frequently done in person rather than over the phone.

In recent years, the claims process has transformed to one often conducted inside. Certainly, technology has been leveraged for the benefit of staffing and production, but has it denigrated quality? Is it possible to negotiate as effectively with an attorney, claimant, or body shop over the phone versus in person?

While effective negotiations can be conducted in any forum, it is crucial that those conducting them have the fundamental skills necessary to achieve accurate outcomes. In some respect, negotiating over the phone can be less intimidating. It can also lead to complacency, however, where negotiations succumb to other competing priorities such as disposition. The fight over “repair versus replace” may take the back seat to getting the claim close, especially if the inside adjuster didn't write the estimate to begin with.

An Aging Adjusting Population

Organizations find themselves challenged on a number of fronts. Let's face it, the adjusting population is aging. Many folks who began their careers negotiating in body shops or law firms now find themselves overseeing claims processes with different dynamics and demands. Others, arguably more fortunate, find themselves golfing or playing shuffleboard in a retirement community in Boca Raton or Belize. Complicating matters is the lack of newcomers into claims organizations. Think about how many youngsters really say, “When I grow up I want to be a claims adjuster!”

While some of the slack can be picked up by leveraging technology, the reality is there is no substitute for someone digging into that BI demand. Think of the benefits of skilled investigators scrutinizing the facts, refuting excessive medical charges, arguing comparative negligence and negotiating a realistic settlement for that $100,000 policy limit demand for claimant with the garden variety soft tissue injury and a history of prior claims.

This is a challenge in a world where negotiation skills have fallen down the list of priorities. A simple benchmark in many organizations is to simply look at the percentage of claims settled with comparative negligence. This is one of the most fundamental blocking and tackling skills in the world of claims adjudication. A far more common outcome are claims being settled at zero or 100 percent, even in situations involving premises, parking lots, lane changes or intersections. How is this so when juries assess shared fault in similar situations nearly 50 percent of the time?

Simply stated, some have taken their eye off the ball. Basic fundamental skills have taken a backseat to other priorities, such as claims disposition. Don't get me wrong, closing claims is important. But doing so with accurate outcomes is even more important as it impacts not only those involved in the claims, but all policyholders and the public in general.

Savvy Negotiation

So where does one start in developing these negotiation skills? Arguably it begins with the hiring process, where the insatiably curious are identified. Like any skill, not everyone has the same ability to skillfully influence outcomes. Some negotiators are amazing, some average and some just aren't cut out for a career negotiating claims. Some have the ability to role play for hours on end; others are paralyzed with stage fright in such a setting. It's not a knock against anyone, but rather a reality check to make sure that those building the foundation of success start with hiring the right people for the job.

Of course, not everyone is building an organization from the ground up. The good news is that existing skills can be improved upon. It just takes a conscientious effort to develop a plan that consists of initial training and ongoing support. In many instances, some who may not have the knack of Perry Mason, can be given tools to improve skills.

During my tenure implementing solutions for a large multinational insurer, we leveraged such tools to assist the adjusters to more effectively investigate, evaluate and negotiate liability and damages for claims. By providing them with the roadmap to success, they develop critical investigation and negotiation skills resulting in improved outcomes.

Such workflow solutions succeed because they tie into behavior modeling and modification. By replicating the thought process and behavioral patterns of your top tier of adjusters, you can transform an entire organization.

At the end of the day, we achieved results by focusing on proper execution of basic fundamental skills. This is the key to success in any organization, regardless of industry. By getting back to the basics, it becomes possible to very easily move an organization from ordinary to extraordinary. Even better, once you are there, it becomes impossible to look back.

Special Reports /

The Art of Negotiation in Claims

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